Financial Traders and Poker

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Tomhgriff1

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Hi all,

Am new to the forum and pretty new to poker.

I am futures trader by profession, primarily trading European bonds. The reason for starting to take an interest in poker is its widely regarded in my industry that poker players make fantastic traders and vice versa. In fact my company has recently hired a couple of trainees based on their poker success, (both of them early twenties and have won 6 figure sums over the past couple of years playing online poker).

Essentially it uses the same skills, it seems, you develop an edge that overtime adds to your bottom line and you use money management and discipline to make sure you give yourself chance for that mathematical edge to play out.

This got me researching online poker a little bit more and am pretty much hooked now (even though im yet to learn much beyond the basic rules).

My question is, did these "kids" that seem to do really well over the past 5 years or so, just get lucky and manage to ride the wave of dumb money hooking up to the internet and playing around on poker sites or is it something that is still being replicated today? From looking around on various forums it seems so many people are hooking their game up to computers that work out betting patterns/probabilities etc etc. All sounds great, but is the game just saturated now and are new guys just going to get bled dry from computers and ultra competitive play? Or is there still room for new guys to get involved/learn and who knows maybe make something?

Thanks
 
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Trimming1

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close analogy

You pretty much answered your own question as I looked over your post. We as a collective group{poker players}have some skills that are developed with time and energy and patience that will help us overcome these (90 ) day wonders that your speaking about. It takes alot of skill to be proficent at the game on a regular basis. Knowing your odds and outs is a plus as well. Good luck in your pursuit of knowlage.
 
CuttleFish

CuttleFish

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Hey Tom,

I do both and the similarities are there for sure.

Both are part time for me as I have a full time gig. Im no expert in either but do ok in both. I would put in on average about 6 hours playing poker/week and the same time learning poker. About 4 hrs/week trading, about 4 hrs/week reading/learning. Last year I made about $22k in poker from a $3k base and about $12k trading off a $100k base.

Similarities:
1. Having to make decisions based on incomplete information.
2. Being able to rapidly adapt to changing circumstances by having a plan.
3. Goor bankroll management/risk management.
4. Understanding the importance of perception versus reality.
5. Basic understanding odds/statistics
6. Discipline to stick to the basics.

The two biggest differences to me are:

1. Taking out the human factor, technically in the stock market, there are an infinite number of influencing factors at play. In poker it is finite.
2. The human element in poker can influence a hand/table/tournament, but it cant influence the entire dynamics of the game. The human element in the market can change perceptions which in fact change actual dynamics.


I still have a huge amount to learn about both but the information for shares and poker is out there if you know where to look.

I am convinced there is an over-riding mental state that could lead to excellence in both, but for me this has more to do with meditation/consciousness studies rather than any technical training.

Good luck with your journey.

CuttleFish

p.s. keep track of the Aussie $ over 2012 and see at least a 30% appreciation against the Euro :)
 
OzExorcist

OzExorcist

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I dabbled briefly in day trading and yes, there are some definite similarities when it comes to being successful in terms of mindset and money management.

In my (again, brief in terms of trading) experience that's about where the similarities end though. You can't transfer chart reading / technical analysis skills directly to hand reading or putting your opponent on a range, for example.

Volume is also a big difference - correct me if I'm wrong, but isn't it normal for a day trader to only make a handful of trades each day? With online poker the only limit to your volume is the number of tables you can keep track of at a time, which is what facilitates results like CuttleFish's (ie: making a large amount from a relativey small initial investment, as opposed to the reverse for most traders).
 
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dlam

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Tom , I think the temperment of a trader is very much like that of a poker player. I did equity and options equity trading and what it feels to stay"marry" to your stock position. Sometimes we have to admit a loss and sell back or buy back at a loss when the market turns against us. This requires a lot of discipline. Much like having AA preflop and raising preflop only to have 4 callers and facing a wet board with heavy multiway action after the flop.
And if the market goes our way and we can decide to close our position and lock in the profits or let it ride and possibly not be foolish enough to see a reversal in price. Much like flopping a set or low straight and trying to trap others only to let a flush or higher straight beat us by the river...
So many world events and natural catastropes can effect the market price long term...poker outcomes are random but controlled...as there are certain possiblities that can only happen.
IMO poker continues to evolve as the limit games becoming dead and the no limit stragety are more important for profitablilty
 
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dan abnormal

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The trading sites seem to have a setup like poker. HEY DEPOSIT $200and we'llmatch you if you make this many trades in this this many days.
 
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Tomhgriff1

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Sorry for the late reply guys, only got an email to say ppl had been replying to my question today.

Thanks for all the responses, interesting to see there are a few traders here. Cuttlefish, well done on turning a profit if youre trading part time youre already doing better than a lot of people.

OzExorcist. Actually it depends, but most day traders will trade 40/50+ times a day which is actually why i think there is a big similarity between trading and poker. Because most of those trades you are out in a couple of seconds for a small loss or break even (a scratch) because you dont think its any good. Only takes one or two good trades/(hands) and with money management you make your day off that.

Dlam i think you are spot on (if i have understood you) in what you say about the infinite factors effecting the market, you know a Full House will always beat a Pair. And that is controlled. In trading what is a good hand one day isnt the next day very often because some outside factor has changed (an interest rate decision, some foolish politician saying something etc). And this is the reason I think poker is something that can be beaten long term if you have the right skills.

However with trading it gets harder and harder, technology is squeezing out the need for humans, if a trader that makes ok money today could go back 15 years they would make fortunes. Would you say the same is true for poker? Or does that controlled environment mentioned above a reason why the rate of the games evolution is a little slower? I mean is there room for a gu yto come in and play one table at a time on his own able to make steady money or are all the online poker champs using super computers playing 8 tables at a time etc?
 
OzExorcist

OzExorcist

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Most poker players will tell you much the same thing about poker - that a player doing OK today would make a killing if they could go back in time to the boom era (the early-to-mid noughties, between Moneymaker's win and Party's withdrawl from the US market) because nobody knew how to play then and there was tons of dead money :p

The answer to pretty much everything though is the same as it always is in poker: it depends.

For starters, eight tables isn't really that many - serious multitablers play more like 24 at once. They're not using super-computers to do it either, just hand tracking software and a HUD that gives them stats on the hands they've played with each of their opponents: how often each person voluntarily puts money in the pot, how often they three-bet preflop, etc.

Pretty much any software that gives you information beyond that is against the terms of service of just about every reputable site, and they're pretty good at tracking down and kicking off people who use it. Technology squeezing people out isn't the problem in poker.

Following on from that, you don't have to use the legal tracking/HUD software to win, and indeed some of the biggest winners in the game claim not to, but it certainly makes it easier. Likewise you could certainly make money playing just one table at a time (with or without a tracker/HUD), but you wouldn't make as much as if you were playing two or four or more, and how much you could potentially make in that game depends on all sorts of different factors.

Nor is poker free from the outside influences and a multitude of other undertainties. Knowing that a full house will always beat a pair is really only equivalent to knowing that selling higher than you bought will net a profit in trading. There are a bunch of uncertainties you have to deal with, ranging from "how do I know my opponent actually has a pair?" to "what if the fish at the table decide to leave because the mouthy douchebag in the three seat keeps berrating them?" to "what if a government somewhere does something that significantly reduces the size of the player pool I have access to, and therefore my earning potential?"

There's no way of knowing whether the kids your company recently hired made their money in poker because they were lucky or because they were good - or indeed, if they really made that much at all. Putting them aside, if you are good, make the right decisions and stay ahead of the game then it's certainly still possible to make money in poker. Maybe even lots of money. But I stand by my previous statement: mindset and money management are pretty much all that poker and trading have in common, unless you want to count sitting on your arse staring at a screen all day ;)
 
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